TFSA confusion | Tax Free Savings Accounts | Discussion forum

There is no mystery with PT. Call them, open an account, let them set up a link to your home bank, transfer funds and pray that current interest rate will stay.
All that might take up to two weeks as you will have to send them void cheque, and maybe some other docs, cannot remember now.
They have simple internet banking but sufficient to transfer funds from your home bank and back. It takes 2-3 days for funds to go over or back. Similar to any other internet banking. You can ask to link other banks' accounts if required.
They have small but efficient staff. Before internet banking transfer request was done by either phone or e-mail and it was Always processed the same day.
They are CDIC insured...

Kanaka, the no commission ETF's that you are talking about are only when you buy and sell them but there are annual fees of 30 to 85 basis points depending on the ETF that you forgot to mention.

Over the next 10, 20, 30 years, these ETF fees will increase with H.S.T. added on these and new fees can be added anytime which they will.

An ETF that earns a net 5.00% after paying 65 basis points over 30 years would cost total 87.90% in ETF fees. The annual 65 basis points ETF fees is really 293 basis points per year in ETF fees.

This means a one time, $31,000 total TFSA unused TFSA contributions from 2009 to 2013 invested in the above example ETF in 2014 until 2044 would cost $27,250.11 in total ETF fees or $908.34 per year in ETF fees.

Remember, this is a one time TFSA investment and for one person. If every year TFSA's are maxed out and this is a couple or a family of four, it would be easily be between $88,000 to $176,000 in total ETF fees.

This is not including the initial $31,000 in TFSA's invested per person as well. This is an additional $54,500 per couple or $109,000 for a family of four.

This is getting close to $300,000 in total ETF fees in their TFSA's. This is not including other investment accounts like RRSP's, RESP's, non-registered accounts etc.

This is with no new ETF fees added, increased and new, higher taxes increased like the H.S.T etc. on ETF's.

Their no commission feature is a short term gimmick and will creep up in future years.

It could be already included in their other fees that many people fail to research as they know most people are busy and have little to no financial, investing knowledge, experience.

Mutual funds are a perfect example. I hope you know what ETF's you are buying as they can change many things anytime like mutual funds and did you read the whole prospectus.

ETF's have many rules, regulations, terms and conditions, risks, fees that can be added, changed, increased anytime so people need to know this.

Bond ETF's, bond index funds, bond mutual funds have no known fixed future value and maturity date.

ETF's are lower fee mutual funds in disguise and people should know that they are not individual investments like stocks, bonds, GIC's etc. and are used mostly for trading vehicles and not for investing.

Thanks, from SD2013.

Average_boy50, our family tried mutual funds, ETF's of all types that investing in bonds, to equities to real estate etc.

We never made the rates of return that they say exist. They have high fees but now with ETF's that are lower but who knows for how long and what new fees, restrictions or other surprises that can come up in then next few years.

We researched using many books, online stuff and we were not comfortable with what advisers, investment dealers, brokers etc. told us after we tried a few different type of investments and had many bad experiences.

I do not want to tell you where to invest your money because you may have a different mindset or view but the most important 3 things that helped our family is this.

One, we made sure we bought a house that we needed and was affordable, realistic in price that we could pay off within 10 to 11 years.

Even, if it happened that we did not pay off our house in 10 years, we had a small mortgage left maybe $20,000 to $26,000 at most.

We never looked at our primary house as an investment but it was just a place to live and raise our family.

It is an asset that can go up or down in value but nothing more than that and it is not an ATM machine by borrowing on it through credit lines, mortgages etc.

There are many annual expenses from insurance, property taxes, utilities, repairs and maintenance, mortgage interest costs, condo fees if it is a condo, CHMC insurance premiums for mortgages under 20% equity or down payment, real estate commission, lawyer fees, land transfer taxes, H.S.T. on almost everything.

Don't forget that these expenses, costs, taxes could easily on average as a group increase by 2.5 to 3 times in 25 years.

Second, avoid debt as much as possible by paying cash or by outright being paid off by a debit card, check etc., pay as debit payment on a bank account.

This means car leasing, credit cards, lines of credit and many other ways like no payments for 16 or 18 months can get people in real trouble fast.

Basically, live a little below your means if possible and save as much as you can without feeling overwhelmed by not living a little today.

Third, we always knew the great benefits, peace of mind by saving and having at least 18 months or more in combined, liquid, flexible, short term investments like cashable GIC's, higher interest savings accounts, term deposits, redeemable GIC's, 1 to 18 month GIC's some times up to 2 years.

For the investing side, our family is conservative as investors and don't feel comfortable putting are hard earned savings and investments at at high risk or potential loss of principal and capital.

Even a smaller portion like some advisers, brokers point out like 25% to 40% in to equities, REIT's, corporate bonds, high yield junk bonds, stocks common and preferred, ETF's of all types, mutual funds and index funds of all types etc.

We make sure that we always put the maximum or close to as much as possible in RRSP's, RESP's, TFSA's which compounds our money faster and gives us more interest and other income for our future.

This also reduces and defers our income taxes and allows us to split income with other family members giving us more options.

We buy laddered GIC's from 2-7 years when their rates are higher than government bonds, government strip bonds.

Today, the highest rates or bond yields are for 12 years and longer term provincial strip bonds. This may change with higher interest rates, bond yields in the next few years with a close of the gap with Canada bonds, Canada strip bonds.

We buy only government bonds, strip bonds but have them laddered or staggered from 8 to 30 years but we have a large enough amount in investments to do this.

We are satisfied to earn between 4.50% to 5.00% over the next 10, 15 plus years but others say this is not great but we are doing just great and saving, investing thousands a month.

Finally, I would say that if you are just starting out first make sure you have at least 18 months of your living expenses in liquid, flexible guaranteed savings, investments then have a little longer term investments like 3 to 7 year GIC's by laddering them.

When you have a substantial amount in savings, investments say at least 5 to 6 years or more of your living expenses set aside in total, start looking at longer term investments that you feel comfortable with.

Please, do not use leverage, margin or borrow money to invest because this is just looking for trouble.

I hope this helped you in someway average_boy50, thanks for asking for my opinion and showing interest, patience in my posts., from SD2013.

Loonie and kanaka, ETF's have annual fees which usually include management fees, operating expenses and sometimes some other annual fees as well.

Google, Canadian ETF's and you will see loads of information anywhere from 30 to 85 basis points of annual MER's or annual fees charged for ETF's.

Index funds like Vanguard was in the U.S. for decades before coming to Canada and was the only lowest possible option for investors interested in the Dow Jones, S&P 500, Russel 2000 etc. and other indexes such as bonds and sectors like real estate, utilities, financials, energy etc.

All mutual funds, index funds, ETF's have annual MER's or annual fees. It is just how much and what they will be in the future, higher is a certainty.

Also, be careful that some discount brokers charge a commission or fee when you sell ETF's, mutual funds, index funds.

Thanks, from SD2013.